Hi QOH! Interested to hear why Arvida, what persuaded you in that decision.
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Announcement of record full year profits and saying they are on tarck to do far better next yeare
The share price will go gangbusters
If buying take tj's advice (and all those who bought up big on Friday) and buy Monday
Be $1.50 by end of the week ...and heading higher in June
Remember it was $1.36 odd not quite a year ago and things are decidely better now so share price has heaps of catching up to do
Arvida always a bit obtuse / vague with their guidance (not good) but reading between lines underlying profit $45m to $50m is likely
Should be way over $1.50 on that basis .....even more if they obtusely say 2019 going to be really strong.
Guarantee that revaluations must be a lot higher than projected and with what they have said about sales all that has to come out somewhere in the financials
That consensus target price on 4traders of 137 is before analysts knew how good things have gone
Just imagine what their revised targets will be next week after the expected good news
Wow
Hey ill let you know how they treat their residents, hopefully in a month or so, have to say they have been pretty fair with the way they have treated us so far. But i guess there is the possibilty no one else wanted it.
Hope you guys getting in fast ....share price on fire already today’s
Maybe $1.50 by end of week a tad pessimistic
Boomer of a result tomorrow
Don’t miss out
The way this has been going one wonders if this isn't a leaky ship in terms of insider buying ?
I think this ship has sailed as far as I am concerned. Would have been good buying under $1.20 with the benefit of hindsight.
Rather large wall at 1.29 just appeared
Arvida seem to be rather obtuse with financial guidance ...seem more content on build rates etc
All I can make out is when they made those acquisitions last year. They said they were happy with analyst ( 2 of them) forecasts of $28m underlying profit for f18 and the acquisitions would bring in $9m in F18....and mentioned further upside etc etc
So bare minimum tomorrow is $37m. Completion rates and sales appear to be higher and then there’s the margins which must be pretty high seeing what’s happened to property prices since last valuation. That’s where the $45m to $50m word on street comes from
Doubling underlying earnings is pretty good eh. Better than sum other companies
Let’s say $45m ....that’s eps 11 cents ....say 14 cents in F19 and heck even $1.70 at a forward PE of 12 looks cheap as
https://www.stuff.co.nz/nelson-mail/...st-near-nelson
good article on stuff today for those interested....
Great result, news of the (extra) special dividend must have leaked yesterday... underlying cps growth of 16% - that is better than ryman, but who cares ARV must still be a dog.
Maybe I should not have been so bullish and excited the last few days ....word on the street wasn’t as reliable as usual
But $1.50 share price still on cards by end of June
A VERY long way short of the $45 - $50m underlying profit doubling from last year. Development margin only 19%. Can't be that good at doing their SUM's can they !
Outlook comments about costs weighing on the sector...didn't sound all that optimistic did it !
Yeah... NAH...better off sticking to SUM other company with a much longer track and well proven record of strong growth.
Underlying profit up 43% odd but I'll leave others to work out the lower rate that applies to underlying EPS growth due to the significant share issue during the year.
I, and clearly Mr Market, didn't realize they indicated 37m, in fact the actual consensus was around the 30m mark I thought.
$45-50m underlying would have been wonderful, but we'll have to wait another 9-12 months for this.
Lets see how Mr Market treats this dog today.
Shame they had to pay a special dividend just to get it into the 60-80% payout range, and couldn't re-invest more for growth... wouldn't want to drop below it otherwise the residents, many of whom are also shareholders, would be dumping
This is a great result, the underlying earnings growth for the last 2 yrs nas been 46% and 43% respectively. I`m not seeing any fancy accounting in there skewing the numbers. The result is just what I would expect from a young retirement village operator with loads of development pipeline. IMO this result is just where it should be ... not too hot or too cold.
Share price well into the 130s
Go you little beauty
Fantastic result. One of the reasons I picked ARV was because of their bias towards care revenues rather than property - I thought it would be good in the context of real estate headwinds likely in the near future. I haven't had the chance to look too closely at detail yet, but eh headline highlights for this result seem to bear this out.
Not often you get impairments in this sector
“Of the 21 cash generating units (‘CGU’) with goodwill attached, two CGU’s were unable to support the carrying value and were impaired”
Written down by 1.2 million
ARV stunning result and share price up a miserly 1 cent
AWF a shocker of a result and share price up 7%
Go figure
AWF a shocker result, but Mr Market expecting even worse... ARV a stunning result, Mr Market hasn't fully appreciated it I reckon... might do by weeks end
Maybe Mr Market is getting confused with the A's, then again ARV shares are at a 10 month high... AWF on the other hand, well not so much
FY19, 111 units to be delivered at around ( 20% margins ) plenty of high margin villas and none of them being low margin care beds could see development margins higher.
So guessing it could equate to around 15m added to profit FY19 so around another 35-45% profit growth in store for us again next year.
Happy to hold on till the market catches up to how nice having ARV in your portfolio sounds ... perhaps at 16x earnings this could already be caught up.
Disc: hold ( value it at $1.50 )
16x earnings....? hmm makes that other dog Oceania seem ultra cheap (at, apparently, 10 for FY18e - ah well, we'll find out if it is 10 in August)
No worries, ARV still worth well over $1.50 with ryman-like continuum of care, but without the ryman-like underlying PE ratio (far from it actually)
ARV have announced a pretty decent result and continue to deliver what they say said they would.
I haven't got into the detail yet, but the question I have is what does this company need to do to lose the dog label??
Disc: have been a holder for quite some time
Weeell, yeah, I do agree with that!
I would like to see a nice SP break out like Summerset had earlier this year..
Yep, good solid result and SP down. Divi + special due soon as well.
tj - have Forbar raised their target yet. Wasn’t the last one $1.61 or something
They pretty keen on it eh
Although forecasts for coming years were raised, just not that target price... so it remains at $1.52 (it was $1.61, then labour got into power or something)
Finished at $1.27 today, below $1.30... reminds me of when I said OCA wouldn't go under $1 again, it kept going quite a few times under that dollar mark...
Probably see development & subsequent unit deliveries nearly doubling for ARV over the coming 3-4 years (excluding any acquisitions)... market clearly isn't so convinced at the relatively fast pickup in build rate, or if this can be sustained
That other share that starts with A winner69 mentioned did even worse than ARV today, Mr Market clearly not sure what to think of anything really
Debt facility increased from $150m to $250m
Good banks have confidence in them
Nothing like a bit of debt to keep things going
Bigly increase - banks have huge confidence, Mr Market, well clearly not so much... not even close to that $1.50 mark
I think sum others have gearing neary twice as much as ARV (at FY18), seems to have worked very well for them so maybe $250m is still to conservative and need to pump up that debt etc more?
Nobody seems to care about interest rates and costs of borrowing
Adjusted NTA according to directors is about $1.28. PE isn't far off Summerset despite having a shorter and less impressive growth track record. Maybe its simply a Labrador and not a greyhound ? (as I suggested some time ago). You get reasonable divvies with this one unlike many others so simply give the lab a pat and enjoy the steady ride.
I would be quite happy giving them the dividend back if they gave me the option.
Personally, if they cut the dividend, I’d be a seller of my quite substantial holding (if fact if they fail to grow it) - if you want a pure growth play in the sector there are other options, whereas Arvida fills a real need for those looking for income and some growth in sector with a very bright future
Things like this happen all the time .....but some things make a good story
https://www.stuff.co.nz/dominion-pos...medium=twitter
We are moving into an Arvida village shortly, i promise to help evacuate the elderly and infirm if necessary.
Soon Ill be able to give you a perspective from a resident’s view.
The 'original dog' has retained its status by once again become the cheapest in the sector (on both FY19 and FY20 metrics - PE, EV/EBITDA, EV/EBIT, cash dividend yield - every metric in the book basically, including the book value if you pardon the pun).
You'd think with a development pipeline increasing by over 240% in the coming 3 years (from 97 units in 2018 to 235 in FY21) Mr Market would begin to get a bit excited - but no, Mr Market couldn't care less by the looks of it.
Yes, it is cheaper than Oceania
On another note, At 31 March 2018 ARV had 46% of its care facilities at the maximum four year DHB accreditation (second highest in the sector after RYM at around 50%). Not bad for a dog, probably better than that RYM soon as well (RYM by the way is literally twice as expensive - ie twice as high underlying PE as arvida)
And they say Oceania is better at care? Facts say otherwise I suppose
And on another note, seems a ARV are getting a bit more serious about development, having lowered the payout range at the AGM... now they need to deliver that bigly increase in development. And if they do, maybe Mr Market will begin to reward (instead of ignore) them.
t_j .....maybe for real investors like fund managers / investment advisors the Price / Book ratio is the main one they look after
Other ones lazy way of assessing ‘value’
Hi all
I have just started looking into Arvida. Could someone give me a rough rundown on where it is currently at?
The fundamentals obviously look good. Compared to RYM it appears cheap. Is it undervalued or is the price low for a good reason?
Any insights would be appreciated
one of the concerns with a sector so rewarding in general is that one becomes overexposed to it , and no one can know what might arise and should something occur eg a regulatory event that is a shock to the entire sector then portfolio ramifications could be quite bad. and the political possibilities do exist now, consider Labour's oil and gas exploration brain fart.
Yesterday's DomPost had a promotional insert for Arvida's Village on the Park - site of the former Athletic Park rugby ground - advertising new units which are due to be available next year. Current residents speak well of this village, at least in my experience.
Disc: Holding RYM, SUM, OHC - I think I'm a little overwight in this sector!
A finish at $1.31 means ARV closed at its highest point in just under a year.
A bit like OCA, ARV still far to cheap, but at least a step in the right direction.
Back under $1.30 next week without doubt, but we can all enjoy it for the weekend at least.
https://www.nzx.com/announcements/321987
nice little land acquisition. some more room to grow for the one that everyone forgets.
Soon all time high? long term holder.:eek2::t_up:
Another quality greenfield acquisition... They could probably fit around 500 units on that land (given they are fitting 267 units on their other greenfield site that is less than half the size they just acquired...)
While the strong cash flows from top rate care with extremely high occupancy keeps rolling in, the development pipeline has gone from 1100 to 1600 ish, the development team will be kept busy for a fair few years to come.
Sum other operators are struggling to maintain their current development rates and seeing all sorts of swings and sways in their sales/re-sales (and even being questioned on the transparency of their delivery numbers...) meanwhile ARV will only be increasing its development deliverers (what ever way you want to measure it) year after year, for at least 3 years to come... although 'only' 97 were delivered last year (who would have thought they'd be doing that back in December 2014 when they listed!), buy FY21, we are going to see nearly 250 units developed and FY22 could be 300+... wowee that is nearly as much as sum others (who are now desperately trying to catch up on the care side of things - and doing a 'very average' at best job at it at it).
ARV still treated like a dog - otherwise would be over $1.50 already, some say.
Fast turning (back) into the (under)dog
Looks like a good land acquisition and a nice warm part of the country to retire. Every dog has its day...
Hardly any sellers left now - people must be buying what they can while it is still cheap as...
1st quarter dividend (likely to be 10% higher than 1st quarter last year) is also just around the corner (announced this week)
Not far off the all time high of $1.37 - hard to believe that was early June last year, and since then ARV have only gotten bigger and better yet the share price hasn't kept up.
Looking like its got a pretty shiny coat, could be a show dog candidate :D
Disc: Don't own, can't be everywhere, prefer SUM and OCA.
looking pretty strong now...up 3c for the day. That suddenly make sit the 2nd largest in my portfolio, and has just crossed above the "market return" line for me...very happy that there seems to be bit of reward after a long 18 months.
Forsyth buying even more of ARV today - brought over 3m shares and now own over 8%.
Not too surprising, probably saw MET's result and realized just how cheap ARV is... no bigly NPAT drops here, no bigly (and probably inaccurate - in a negative way) remedial costs, no bigly catch up in the increasingly important care offering, just sustainable growth + reasonable dividend yield - no wonder ARV is a boring dog.
The resident shareholders (of which there are many) and holders in general will be happy with the Q1 dividend announced today - up over 13% on Q1 last year, despite a lower payout ratio.
ARV almost as boring as RYM, one of many similar qualities ARV has to ARV - but opposites on the valuation side of things.
Last week you could buy ARV for $1.34 or cheaper all day long, since then they've ex-divi and handed out a 1.1 cent dividend (after tax). Today someone can`t get enough at $1.35..... I just don`t get this game sometimes.
ARV cheap, no no. Outstanding value, yes. ha ha :)
On a slightly serious note though, being stuck with a tag of being a cheap share (as opposed to excellent value), probably doesn't help the share narrative.
There may be an element of shares (like many purchases) being affected by perception. People just don't have time to make really informed choices, hence the over priced rubbish (referring generally to consumer goods, cars etc) some people buy when there are clearly better value alternatives.
True enough and ARV may be one of those. If the business is good then the value will eventually come through.
I couldn't see Warren Buffet buying SUM but he might see ARV as representing good value.
OCA have had a bit of SP surge recently. I already have a small holding (4% of my share portfolio) in OCA, a larger holding in SUM but nothing invested in ARV. I would like to invest more in one of ARV or OCA but cannot decide between the two. My current preference is to buy a similar size holding in ARV as my holding in OCA.
From ANZ secs:
ARV sp 1.35 nta 1.23 div yield 3.7% p/e 8.76
OCA sp 1.22 nta 0.88 div yield 3.2% p/e 9.6
Is ARV now better value than OCA. Or has OCA got better growth prospects?
* I would be a long term investor (at least 5+yrs)
For me, oca. I sold out of oca a while ago because i wasn't happy with the percentage of low price vs premium units, which i believe don't make financial sense. This has now been fixed. The only thing i don't like about oca is the risk of wage increases, which i believe are better covered if by SUM.
I think that oca are a good buy, but no longer a bargain. Im not that excited about the arv growth story. But then ive not got up to date research on arv, so maybe im wrong.
I think wage increases are relected in the maximum contribution (payable either by the Health Board or by the resident) within each Health Board. There was a 9.9% increase in that amount in July 2017 to reflect the pay equity settlement.
The government will need to set the level so that providers will want to provide accommodation. I think that there will come a point when ORA purchasers can no longer be tapped to provide any cross-subsidy to care beds.
The max contribution amounts for Manukau City area in Counties Manukau:
$1,112.30 2018
$1,051.12 2017
$ 959.84 2016
So there was a 15.9% increase in two years (when in the same period there was a 3.2% increase in the CPI)
The OCA village of Elmwood in Manukau for example have developed vacant land, in the last few years, and provided more ORA villas and rooms and their latest developments have been top range villas (I think still cheaper than the closest SUM village villas).
That's right, and thanks for the good info there. What bothers me is that the party goes up then they have to ask for more from the health board. What if the health board says no? Possible under a govt that spends too much, has no reserve and promises lots.
Probably oca are a safe bet, but I get worried about such things.
I'm in pretty much the same boat as you Bjauck except that I have some ARV along with SUM and am looking at buying some OCA now. ARV's numbers look good to me though OCA have positives as well, I decided having some of both was the best solution for now.
The cost of good quality long term care with an ageing population is an ongoing issue. Various scenarios (and combinations thereof) for the government for meeting increasing costs:
(1) Reducing the quality of care
(2) Increasing the number of residents who contribute to the costs
(3) No longer subsidising the cost of hospital level care for “wealthy” residents.
(4) Nationalising rest homes or building State Institutions - this is often a left-wing solution (a beguiling solution for some socialists). This could come about if government refuses to pay more for the cost of care to private providers - and private providers refuse to provide more beds to meet demand. Most on both left and right would dismiss this option as doomed to fail.
(5)Increasing taxes, introducing new taxes to provide enough money for first rate care...(Hello to our old friend the TAX Working Group!)
(6) Letting Robots take over. Maybe technology will come to the rescue if carers price themselves too high. Who knows what sensors in the rooms and robotic toilets and lifting gadgets may be able to do in a few years....
Latest Forsyth Barr research, is available from Forsyth Barr, probably only to their customers
STMOD edited
You seem to know these things about ARV
Why is analysts (including Forbar) earnings forecasts (expectations) diminishing as time goes by. Like current consensus F19 earnings is lower than it was a year ago, 6 months ago etc. (same for f20)
Is it that they aren’t totally convinced about ARV performing or something.
In November 2015 FY18 EPS forecast was 6.2c and FY19: N/A
In May 2016 (Don't have November for some reason) FY18 EPS forecast was 7.2c and FY19 8.0c
In November 2017 FY18 EPS forecast was 8.3c and FY19 EPS Forecast was 9.7c
FY18 was actually 8.9c - beating 3 continuously upgraded FY18 estimates by a large margin... in just 2 and a half years underlying EPS forecast by Forsyth (which we all know love and have a bigly bias for ARV since its listing nearly 4 years ago) was smashed by nearly 44%.
A week ago (September 2018) FY19 EPS forecast was 9.3c and was downgraded from 9.7c in late 2017 due to a note in March mentioning "a more conservative view on operating costs and sales margins in FY19 and FY20", price target was subsequently dropped under $1.60 to be 'only' 10% above yesterday's record close price (and we won't bother looking at the dividend yield slapped on top of that)...
If track record is anything to go by (although yes, still small by other players standards ARV are building up quite an impressive one - operationally and financially), I'd reckon they'll be hitting closer to that 'original' 9.7c than the 'already far to bullish' forecast of 9.3c (with target price of over $1.50, the former with target price over $1.60)
One thing is for sure: it'll be way higher than in May 2016 when the target price (yes, waay back then) was nearly today's share price, yet FY19 EPS was only forecast to be 8.0c, not 9.3c (or 9.7c)
To say "analysts earnings forecasts are diminishing as time goes by" is right for FY19 and FY20, but ARV's (actual, not forecast) track record would show they have quite literally been all wrong (far to conservative) in the past which begs the next question, why did I bother doing this post when we know all of the underlying EPS forecasts are just 'random made up numbers' that ARV are almost sure to exceed (as they have done ever since listing)?
Very efficient tax. Almost inevitable in my opinion we will follow the pattern of what happened in the U.K., first 17.5 and then 20 sometime thereafter. With a bit more tweaking of assistance to low income and family assistance its probably politically palatable as well.
TJ...why did I bother doing this post when we know all of the underlying EPS forecasts are just 'random made up numbers' that ARV are almost sure to exceed (as they have done ever since listing)?[/QUOTE]
Thanks Trader Jackson for a well laid out and factual summary. I appreciate the effort you made for the benefit of us others. This is Sharetrader at its best where we posters get really specialised with different companies and the intell gets swapped around.
I`d like to think I got pretty darn good at HLG while it was so undervalued (well my bank account says I did anyway) and was very happy to share the facts with other posters playing like a team. Off topic, tomorrow will be interesting for it as HLG announces its 6 monthly p/l and hopefully a few insights to the Ausy progress. We will hopefully get a feel where the new share price should lay now.
Back to ARV , I really don't know why this company gets left out of the limelight so much. I guess after 4.25 years of sluggish 15% (inc divis) yoy share price growth leaves it lagging from its peers, but like you I think this company is underrated. I guess for now it will have to stay in the shadows of the other great villages but I am nicely invested in ARV knowing it will have its own day sooner or later.
Disc- also got SUM + seriously overdosed on OCA.
https://www.nzx.com/announcements/325037
Of interest to me was the (continued) bigly increase in planned or consented units and beds pipeline:
FY16: 187
FY17: 907
FY18: 1099
Today (less than half way through FY19):1379 units/beds (less than 40% of those are that low margin [but crucial to attract residents] needs based stuff)
With a similar (net) development pipeline, a sort of similar post development portfolio (units/beds wise), ARV should really be at least as exciting as OCA... looking forward to 1H19 results out in the next month ish.
Yet 4 years on from listing, and a track record of increasing EPS, ARV is still the dog (and the cheapest) of the listed retirement stocks.
Lucky ARV aren't going too big into care suites, I believe there has been some push back against them
all of a sudden outta nowhere ARV down 5 cents to the lowest it's been since July... what's going on?
(volume very low at least)
Every retirement stock taking a hit not just ARV
Yeap, its a good old fashioned game of whack a mole at present (for those that don't know the game) - https://www.youtube.com/watch?v=D0n8N98mpes
5 listed retirement players just like in this game...